Case study: Giving stock pilferage the boot

6 Dec 2004

Jim Liston has been in the shoe business for more than 20 years. His distribution company, Jim Liston Shoes, provides shoe shops all around the country with the latest footwear fashions. Three years ago, he branched out into the retail business when the opportunity to buy the business of a client who was retiring came along.

Today, his company owns and operates four stores under the Avanti brand name in Finglas, Naas, Nenagh and Clonmel, and has a part interest in Cinders in Newbridge and employs 20 people.

In total, the stores sell in the region of 50,000 pairs of shoes per year, all of which are distributed from the company’s warehouse in Mulhuddart, Co Dublin. Keeping track of these is a mammoth task and up until last year was done entirely on paper. However, this was cumbersome and did not provide a full picture of how well or otherwise the business was doing. One key problem Liston had was tracking pilferage.

“I knew I needed something to keep tighter rein on things,” says Liston. Realising he needed some form of computerised system, he began looking for a suitable supplier. He came across a stock management system called Top2Toe that was in use in one of his client’s shops. “One of my bigger customers recommended it and I thought if it’s good enough for them it’s good enough for me. And I knew the system was suitable for shoe shops.”

The system was provided by Datapac and includes stock-control management software that runs on a central PC and on Liston’s laptop, as well as specialised tills in each of the shops.

As stock arrives in the Mulhuddart warehouse it is barcoded and entered into the system. The database also allows for digital photos to be included in each record. Stock is allocated to each shop and a component of the system, called IPOS, uploads the information to the cash registers in the shops. “That way we know what to expect in the delivery,” says Liston.

Each night, the central PC connects via ISDN lines to the tills and downloads all of the sales information for that day. From his desk, Liston can see how well each shop or each style is doing. He can also see what his margin is for each line of footwear and in each store.

Liston can also get a fairly accurate picture of what his stock level should be at any one time. The tills in each shop can also view this information so if a client in Finglas is looking for a given size of a particular style that might happen to be out of stock, the shop assistant can see, for example, that the Naas shop would have it and can request it to be sent over.

“Before we installed Top2Toe that would have been impossible,” he says. “The shop assistant would have had to ring each of the shops until she found the shoe in question.” Liston is also able to program the system so that if stock levels of a particular style fall below a certain level, a reorder is automatically placed with the supplier.

Physical stocktaking is also much easier. An employee with a scanner can go into a shop and simply scan the barcodes. Upon returning to Mulhuddart, this information can be compared to the information in the central PC, which shows theoretical stock levels. Any discrepancy comes to light immediately.

The system also allows Liston to spot abnormalities. For instance, one shop managed to sell more than 100 pairs of a particular style of boot, while the other shops sold about a dozen each. Previously, this would have gone unnoticed but with Top2Toe, the spike was evident. It turned out that a local boutique had used the boot as part of a window display.

Liston can also spot which lines aren’t selling and he is able to tweak the price. “I can enter a modified price here and it will update the tills overnight. Of course, I’ll tell the shops I’m cutting the price but when they go to scan the product, the new price is automatically in the till,” he explains.

Liston describes the installation as fairly straightforward. “Datapac was on the ball and had everything in place in a day or two,” he says. “It also came out and trained the staff in the shops.” His biggest problem, however, was deciding what to do with stock already in place before the system was installed. Should he barcode each item of stock, which would take some time, or let the old stock go through the old system naturally? “In the end we decided to barcode all the old stock with just one number,” he says.

Liston freely admits he is only using a fraction of the software’s features but he has further plans for the future.